Important update: The SAIF and the SDIFoF

Important Update on SAIF and SDIFoF

Important update: The SAIF and the SDIFoF

We have recently experienced an increase in the demand for the Sanlam Alternative Income Fund and the Sanlam Diversified Income Fund of Funds.  We foresee even greater demand for these two funds going forward, especially over the next two months.

At this stage, we have capacity in excess of R2bn and are working on new investments to provide for the expected growth of the funds in the near future.  If you are planning to invest in either of these funds in the next two months we encourage you to act quickly, investments will be accepted on a first-come, first-served basis.

THE KEY FEATURES OF OUR TAX MANAGED INCOME FUNDS:

SANLAM ALTERNATIVE INCOME FUND (SAIF)

  • Tax efficient return
    • The after-tax return exceeds money market fund returns by 1% on average, after all taxes and fees have been taken into account.
    • The return consists mainly of dividends with a small interest portion of 5%-15% (currently 9%).
    • Monthly income distributions.
  • Constant R1 unit price
    • The only remaining ‘dividend income fund’ with a R1 price.
    • No capital gains tax considerations.
  • Underlying investments
    • The fund invests in unlisted redeemable preference shares and liquid instruments.
  • Low risk
    • Invests only in instruments with the top 5 local banks and highly rated institutions.
    • Has been assigned a AA- (zaf) credit rating by Fitch Ratings.
    • Focused on capital preservation.
  • 24 hour liquidity
    • Repurchases are paid to investors within 24 hours, if requests are submitted before 11am.
  • Fund size as at 31 December 2014: R7.5bn
  • Launched: May 2007
  • Suitable investors
    • High net worth individuals paying a high marginal tax rate who have utilised their interest exemption.
    • Corporate investors with excess cash.
    • Investors seeking a liquid investment with a return exceeding cash.
    • Investors seeking protection from capital volatility.

 

SANLAM DIVERSIFIED INCOME FUND OF FUNDS (SDIFoF)

  • Tax efficient return
    • The after-tax return exceeds enhanced cash fund returns over a 3 month rolling period on average, after all taxes and fees have been taken into account.
    • The return consists mainly of dividends with a small portion of interest and capital gains.Monthly income distributions.
  • Underlying funds
    • The fund invests 75% of total assets in SAIF.
    • The remaining 25% is invested in high quality income funds and money market funds.
  • Low risk
    • SAIF (75% of portfolio) has a credit rating of AA- (zaf) by Fitch Ratings.
    • Historically, the fund has no drawdowns over any 1 month period.
    • Focused on capital preservation.
  • 48 hour liquidity
    • Repurchases are paid to investors within 48 hours, if requests are submitted before 3pm.
  • Low TER
  • Available via Glacier
  • Fund size as at 31 December 2014: R1bn
  • Launched: March 2009
  • Suitable investors
    • High net worth individuals paying a high marginal tax rate who have utilised their interest exemption.
    • Corporate investors with excess cash.
    • Investors seeking a liquid investment with a return exceeding enhanced cash.
    • Investors seeking protection from capital volatility.

 

THE IMPACT OF STC CREDITS FALLING AWAY ON 31 MARCH 2015:

The agreements between SAIF and the issuers of the unlisted redeemable preference shares require the issuers to increase their dividends to compensate SAIF unit holders for the negative impact on their returns due to STC credits falling away.  Because 75% of its portfolio is invested in SAIF, this applies to SDIFoF too.  Investors in these funds will continue to receive a similar after-tax return once STC credits have fallen away.  Click here for more info.

Please contact me for more information and assistance with investments.

Wayne Liebenberg

150223 - Website Staff Small_0001_wayne-liebenberg

 

 

 

 

 

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